Posts Tagged ‘price of steel’

TOKYO, Jan 13 (Reuters) – Japanese steel mills, led by world No.2 Nippon Steel Corp (5401.T), and three big miners including Brazil’s Vale (VALE5.SA) will open talks on 2009 term prices for iron ore this week, a source familiar with the matter said.

Japanese mills will send officials to miners for preliminary talks this week, said the source, who asked not to be identified because of the sensitivity of the issue.

The price talks on term supply for the business year from next April usually start in November in Japan, but have been substantially delayed this year as the steel market has tumbled amid a downturn in the global economy, making demand estimates difficult for both mills and miners.

Japanese steelmakers are expected to call for what would be the first cut in annual prices in seven years amid faltering demand and cutbacks in output, as well as expected strong pressure from Toyota Motor Corp (7203.T) and other carmakers for prices to be slashed on automotive sheet steel, their mainstay product.

Expectations for a steel recovery have gathered momentum in recent weeks as global output cuts tightened market conditions and forced buyers with low inventories to accept price hikes by some producers. [nSEO50718].

In 2008 price talks, Vale negotiated its price first and secured a 65 percent increase from Japanese mills. But Australian producers who settled later managed a nearly 80 percent increase. (Reporting by Yuko Inoue; Editing by Michael Watson)

© Thomson Reuters 2009 All rights reserved.

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What is the effect on our economy today? What will change when the price from steel negotiation takes effect?

We know that the price of steel has changed in the past. We also know this economy has changed in the recent past, for the worse. Those in the steel industry can be sure that with steel prices headed the way they are, this cannot be a good thing for their product. The change also does not necessarily mean a good thing for the consumer either.

With iron ore price talks set to start, one thing is for certain, someone will feel the pinch and many will feel the effect.

S.L.M. 1.14.09 @ 4:09

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